Starting 1 January 2025, cash payments for business expenses will no longer be allowed in Italy. Introduced as part of the 2025 Budget Law (Legge di Bilancio 2025), the regulation mandates that reimbursable employee expenses must be paid using traceable methods. This measure aims to enhance financial transparency and combat tax evasion.
Scope of the Regulation
The ban applies to employee travel and entertainment expenses, including food, accommodation, transportation, and representation costs.
From 2025 onwards, businesses can only reimburse these expenses tax-free if they are paid using traceable methods such as credit cards, debit cards, digital payment and checks.
If the transactions related to these expenses are not traceable, they will be treated as taxable income and will not be deductible for IRES and IRAP.
Implications for businesses
To remain compliant with the new regulation, businesses in Italy should take the following steps:
- Update expense policies: clearly communicate to employees that that all reimbursable business expenses must be paid using traceable methods, not in cash;
- Provide traceable payment methods: issue corporate credit or debit cards for employees, where feasible.
- Reinforce documentation standards: require proof of payment through an accepted method for all expense claims.
Rydoo simplifies compliance with these new requirements by offering integrated solutions that ensure all expenses are traceable.
- Rydoo Cards: issue corporate cards to employees, ensuring travel and entertainment expenses meet the regulatory requirements;
- Smart Audit: automatically detect cash payments on receipts and flag non-compliant expenses before reimbursement.
For more information or if you need help implementing these changes, please reach out to your Rydoo point of contact.